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Imagination pays off (page 2)

-- Logistics Management, 1/1/2006

Page 2 of 4 -- One example: Yellow Transportation has its most costly breakpoint in Dallas. So Lingle devised a routing that bypasses that terminal and instead ships straight to Southern California using pool distribution. From there, the load is subdivided into Northern and Southern California trucks for final distribution—still fast and efficient for the shipper, and much cheaper for the carrier.

Easy Gardener also began sorting and segregating freight according to each carrier’s internal needs. If, for example, a carrier had a scheduled trailer to Baltimore leaving from a regional cross-dock facility, the shipper would load all of its Baltimore-bound freight together. When the truck arrived at the cross dock, those shipments could be loaded quickly and almost effortlessly onto the Baltimore-bound trailer.

Both shipper and carriers benefited when Easy Gardener adopted that loading method, which minimized handling, Lingle says. "My OSD’s (overages, shortages, and damages) were down, their efficiency was up.” That also made it cheaper for carriers to serve Easy Gardener. “Basically, the less an LTL guy has to handle it, the less money it costs them,” Lingle explains.

Opportunities for new efficiencies and lower costs weren't limited to on-highway operations. Easy Gardener's aging warehouse has very little dock and staging space and no yard dog to move trailers; the facility is hardly conducive to moving 200 to 300 shipments a day without a little help from some friends.

To break that bottleneck, Lingle convinced his trucking partners to help move each other's trailers in and around the yard. “We don’t have any yard hostlers, so the drivers come and move other carriers’ trailers for me,” Lingle said. “That’s one of the deals I negotiate. You want your trailer loaded, you have to move some others’ trucks.”

The carriers are even asked to pitch in and lend a hand at busy times. Because Easy Gardener’s business is highly seasonal, only 16 of its 55 freight-related employees work full time; the rest are temporary workers. The carriers know that to keep their trailers moving, drivers will often be required to assist with loading. But they also get some benefit out of that arrangement: By introducing a number of efficiencies and better planning, Lingle has cut trailer-loading times from four to six hours down to an average of two hours.

Could other shippers achieve the kind of savings Easy Gardener has enjoyed? Lingle says that current trends in trucking—limited excess capacity, a severe driver shortage, and high fuel costs preventing most newcomers from entering the market—are favoring the carriers. “The trucking companies are telling shippers what to do now,” he says. “They don’t have to lose money on an account. … Shippers don’t understand the cost of doing trucking is an expensive deal. And that’s not going to change anytime soon.” For that reason, he believes, it behooves shippers to work with their carriers on a plan to split any savings.

And for Easy Gardener, those savings have been significant. Since Lingle implemented improvements two years ago, the shipper has saved about $1 million a year on a transportation spend of around $9 million. “When you’re dealing with carriers, they want to save money as much as we want to make money,” he says. “... It cost me a little bit [to reform Easy Gardener’s traffic lanes] but the savings are huge.”

Lingle also attributes much of that improvement to his cooperative approach to doing business. "The main thing was, I asked the carriers what I could do to help,” he says. Continued...

 

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